Pathfinder: Peter Beck (Transcription)
Mo Islam
Peter, very excited to finally have you on Pathfinder.
Peter Beck
Yeah, it’s great to be here, man.
Mo Islam
Tell us a little bit about where you are because this is the first episode that we’re doing where our guest isn’t sitting in an office.
Peter Beck
Yeah well, I mean, today’s a big testing day here. I’m at one of our test complexes down in New Zealand, so we’ve got a whole stage two neutron tank here undergoing some flight-like testing. So, my apologies for having to do this on the run but you know, the rocket always comes first as you know.
Mo Islam
No, this is great. No, we’ve never done an episode live from a test site. So very exciting. And obviously, for those listening and want the full experience, this one actually may be very much worth going over to YouTube for. But Peter, we have a lot to get to. And we’re certainly going to talk about Neutron today. But I can’t not start with a question about the US election. It just happened. It’s very, it’s very, very top of mind for Americans.
Peter Beck
Yep.
Mo Islam
We’re going through this transition of administrations in just a few months. What do you think this means for the space industry? I’m sure you’ve been thinking about this. What do you think this looks like for the space industry over the next four years?
Peter Beck
I think it’s actually pretty good news for the space industry. This administration feels and seems very pro-space, pro-defense and pro-space. So, I think for the space industry this is going to be a good time.
Mo Islam
Okay, amazing. You know, just, you know, after the news came out of who won, the market reacted pretty positively. So the market’s been rallying over the last couple of days. And, you know, speaking to a number of colleagues and folks on Wall Street, the feedback I’ve received is that they are receiving the highest levels of interest in Rocket Lab since a lot of these equity research teams started covering the company. So your market cap as of the close today is right around 7 billion. What do you think is happening from your perspective? What is the market picking up on in terms of the company, the story, where you guys are headed?
Peter Beck
Yeah, so I think it’s kind of an interesting time in the space industry. If you think about the space industry in general, there’s been a lot of space companies that went public, right? And they haven’t really executed. And the markets are pretty efficient. They’re very good at determining who are the performers and who are the non-performers. We’ve just kind of had our head down and just solidly kept executing. Certainly when we meet with investors, that’s the kind of narrative. We said what we were going to do, and we’ve just sort of gone about systematically doing it. The market rewards people for doing what they say they’re going to do.
Mo Islam
When do you expect Neutron to have its first launch?
Peter Beck
So we’re aiming to have a vehicle on the pad in the middle of next year, I think as everybody knows, there’s always a caveat with that, it’s a rocket program. There’s always things that can take you by surprise. But actually, things are looking pretty good, and there’s lots of major tests occurring, one of which is today. So we’re feeling pretty good. You’re always one bad test away from a delay, but at this point, I think we’re pretty happy.
Mo Islam
So assuming that the first test is successful, what’s next immediately after? Are you planning to test all kinds of systems associated with Neutron, including reusability, on the first launch?
Peter Beck
Yeah we are, but we won’t be trying to land down on a barge. We’ll splash it down in the ocean, trying to stop landing in the ocean. But no, the intent is that the first flight we want to learn and test is as much as we can for sure. Then as the program matures, this isn’t our first rodeo, so we’re pretty realistic about cadence. So, we can get one away next year, and then the following year we’ll get three or more away and then five plus away the following year, and then scale it like that. I think if somebody stands up and says, we’re going to launch one rocket and then do 10 the next year, just, they don’t know what they’re doing, right? It’s just craziness. So yeah, that’s kind of the plan.
Mo Islam
So I want to talk, we’re going to come back to Neutron in just a second.
Peter Beck
And I apologize for walking, but I’m just heading down to one of the propulsion complexes, so I’m just making my way down there. So, if the scenery’s moving, my apologies.
Mo Islam
Yeah, no it looks great. So we’re gonna come back to neutron in just a second. So you spend a lot of your time talking about launch. But of course, your spacecraft business has become a significant part of your revenue and of course, your strategy. I’m curious, like over the next, you know, five to 10 years, what do you see becoming more dominant for you as a business? Which part?
Peter Beck
Yeah, so I mean, the plan was always to move into spacecraft and then I think, as you may be aware, the bigger plan is to be the full end-to-end space company where we actually provide services as well. And I think all big space companies in the future are going to look exactly like that. But at the moment, the space systems are part of the business group, representing about two thirds of our revenue. From at least a market standpoint, that’s quite nice because launch is just super lumpy. It’s always super lumpy. We only get to recognize the revenue at the time of launch. So if the customer is one day past the quarter late, then that revenue slips out. But where we’re at right now is a really nice place that if the launch slips, it’s no big deal because there’s plenty of heft in the space systems business to kind of smooth all that over. But you know, it’s really part two of a three-part story, the space system business anyway.
Mo Islam
Right. And obviously you started things off with Electron. The success speaks for itself. You’re now the world’s third most frequently launched rocket annually. You’re the second in the US. Everyone knows Electron these days, but I do want to talk a little bit about some of the work you’re doing in hypersonics— suborbital hypersonic opportunity, you know, calling it internally HASTE. Is this sort of a key growth area for you?
Peter Beck
Yeah, HASTE is a really important solution that we can provide to the USG, right? So hypersonics in general has been sorely lacking within the US, and the test flight availability has been really, really low. So, to be able to bring a vehicle that you just have full freedom of trajectory and mission profile is a game changer. So, it’s super important to the electric product line. We’ve seen a lot of growth in that area. And in typical Rocket Lab fashion, we announced it in Flu 1. This is not some kind of long gestation period project. There’s quite a backlog there of those HASTE missions now. And like I say, I think everybody’s really excited because now there’s a new capability within the nation to do things that have never been done before, for one, but also at a cadence and a price that’s just like Christmas.
Mo Islam
Right, right. Has Electron so far, I mean, you’re launching very, regularly at this point. Has the vehicle at this point been more demand or supply constrained?
Peter Beck
Yeah, so generally, we’re always waiting on our customers. The market has continued to grow. Last year, I mean this year we had a bigger sort of demand, if you will, with 22 flights. But as everybody’s seeing, what really constrains the cadence of Electron is their customers and their ability to deliver on time. And look, the service that we offer is a dedicated service for our customers when they need to the orbit they need. So if they need to delay a month, a quarter, six months, then that’s just part of the deal, right? That’s the service that we offer. But it does make it difficult to predict cadence, but from a factory and an infrastructure standpoint, we’re not constrained there. It’s really when customers are available to fly.
Mo Islam
So I have one more question here and then I’d love to get a little bit of a tour of what we’re looking at. But on Electron, once Neutron is operational, do you expect to need Electron anymore?
Peter Beck
Yeah, a lot of people ask this question. No, look, Electron does something that no other rocket can do. And, you know, it’s filling a really, really important market niche. So, you know, just as Neutron doesn’t make that go away, no other medium-class launch vehicle does either. I mean, you know, if ride share was the, you know, the be-all, need-all, then there would be no demand for Electron, but that’s just simply not the case, right? There is, you know, there’s just a really important need that Electron fills.
Mo Islam
Yeah, and to be fair, you did just launch a very special mission, was, you know, you have an unnamed customer. We can probably guess who that unnamed customer might be, but, you know, from 10 weeks between contract signing and launch. So I assume that’s probably a signal of a lot more to come, sort of catering to responsive space.
Peter Beck
Yeah, absolutely. I mean, you know, once again, this was kind of, know, that timeframe was driven by external circumstances, licensing and things like that. So yeah, no, it just goes to show that, you know, if a customer turns up, we can pull a rocket out and put it on the pad and integrate and launch in a crazy short period of time.
Mo Islam
All right. Okay, so tell us what we’re looking at.
Peter Beck
Yeah, well this is one of the engine test facilities that we operate here. So this is just the cryo farm for actually rather than one of the engine test facilities. So generally this facility is running two to three engines a day. And these are just in a pure production scene. We just basically pump the engines through here. And the team do a trim run, then an acceptance run. This place just pumps out engines day in, day out.
Mo Islam
Are you primarily testing Rutherford here or Archimedes as well?
Peter Beck
No, just Rutherford here. Archimedes is exclusively in our Stennis site. This is just the Rutherford site. And we’ve got dual cells here. Like I said, the teams closed it down today because we’ve got, you might be able to see it in the distance, a full-stage Neutron tank out there that we’re doing a major, major cryo and test ops today, so yeah the team has know, holded this facility for the day which is an unusual thing in its own right.
Mo Islam
So where is Neutron now in terms of development timeline?
Peter Beck
Yeah, so you think about Neutron and divide it into kind of like three pillars. One, you have infrastructure. Two, you have propulsion and three you kind of have tanks and structures. And all those things we kind of look and treat independently, but they all have to come together at the end. And then on infrastructure, that includes factories, test facilities, and of course launch pads and integration facilities and those kinds of things. Largely think of it as steel and concrete in the ground, which I think a lot of people will be surprised to probably recognize that that’s probably about two-thirds of the total investment of the rocket program is in that infrastructure, that steel and concrete in the ground. I joke sometimes with the team that we raise money and spend money to pour concrete and that’s kind of the reality. Then the next big one is propulsion obviously. So, the Archimedes program is running super well, so I’m very, very happy with that. We took a bit of a different approach with Archimedes, where typically you might start off with water plate chambers and some pump elements and some valve elements. And then, you slowly integrate an engine together with a whole bunch of industrial items and all those Frankenstein bits because you want to test each sort of thing individually. We didn’t do that. We built a production line. The first engine came off a production line, and the first engine that went on the cell had flight software using flight avionics and the whole engine, every valve, every bit of that engine was as we intended to fly. So, a little bit risky in the fact that if we had a major issue, then it would take longer to go back and redesign everything. But, we built a few engines now, a few hundred engines, so we kind of know what we’re doing. So, when we put that engine on the cell, it put us now in a really, really good spot because we’re producing them off a production line. There’s not some amorphous, sickened piece of work that we have to do. We now have to scale production.
Mo Islam
So the original design was gas generator, if I’m not mistaken.
Peter Beck
Yeah, we may have originally talked about that, but yeah, no, we’ve been Ox-rich for quite some time. And the rationale for that is, you got stage combustion because you’re looking for every ISP, every second of ISP. But for us, you make the trade, right? You either have super light tanks and a low performance engine or heavy structures and tanks and a super high performance engine. And for us, we took the highest performing cycle and dialed it right back. So our operating position for a stage combustion engine is super benign. It’s really way down the bottom end of meltiness.
Mo Islam
So just in terms of general design decisions around Neutron, how do you see Neutron compared to Falcon 9? So I know that most Falcon 9 customers don’t really use up the entire payload capacity, the payload mass capacity. Did that inform your design, or did that play a role in kind of informing the design and mass capacity of Neutron?
Peter Beck
Yeah, absolutely. And I’d say that we’ve done a pretty reasonable job of picking the market and what kind of mass classes are useful. We talk about Electron for a moment. There’s a bunch of one ton vehicles and other kinds of mass models there. But really for us, the 200-300 kgs in that vehicle is super obvious as the right place to be. I think with Neutron, that 13 ton regime is a really nice place to be. So, you know, it’s slightly less than a Falcon 9, not kind of appreciably, but what we think is the market is really driving us to and, you know, I guess we’ve had the luxury of working with a lot of customers over a long period of time to really inform that decision.
Mo Islam
If the maiden launch is successful, what do you think launch cadence looks like for the next couple of years?
Peter Beck
Yeah, I think I was mentioning before, it’s like, you know, get the first test flight done. Look, there’ll be a ton of learning as there always is. And then the following year, probably about three flights, maybe a little bit more, but about three flights. The following year, something like five flights or maybe a little bit more. I mean, look, we’ll just follow the playbook that we followed for Electron and just, you know, like it’s a well-trodden path with respect to block upgrades. We’ll also be introducing new things with reusability and whatnot. So you’re not going to hear any kind of unrealistic projections from us on that.
Mo Islam
And you’re still targeting 55 million ASP.
Peter Beck
Yep, yep, think that represents great value for our customers.
Mo Islam
So, I do want to talk a little bit about the development costs. It sounds like based on what I’ve seen publicly that the development will still cost around $350 million. When you look across the landscape of launchers and development costs, you have certain folks who are like ULA or where they’re in the $5 to $7 billion category at the high end. But I am kind of curious how you ultimately achieve that type of capital efficiency? What is the sort of internal culture, the decision making that leads to such a cost structure?
Peter Beck
That’s a good question, and it’s not like one kind of simple answer. To your point, Electron versus probably the nearest competitor to Electron was Virgin Orbit’s vehicle. Richard spent $1.1 billion more than we did getting our first rocket to the pad. It’s not like we haven’t done this before. There is a certain magic here. And I’d say it’s across a bunch of things, right? A rocket program is about making the right engineering decisions. Because where you blow a whole bunch of, and the right business decisions, where you blow a whole bunch of capital is going down dead ends and going down technology paths you have to reverse out of. And I always say to everybody that running a rocket company is like running through a maze in the middle of the night. And at every dead end there’s somebody with a shot gun. So you have to run quickly, but you also have to poke your head around the corner and don’t put yourself in a position where you’re gonna die. That’s pretty much it. And then from a business perspective, it’s building the product that people want rather than the product that you think is cool to build. I think the space industry is full of visionaries, which is awesome, but that’s not enough. You have to be a visionary with a product that actually people want to buy, and I think that’s super important. And then look, there’s the Rocket Lab team. I mean, you know, we’re doing a big test here, and half the team just turned up in camper vans and just worked into the middle of night, spent the night, woke up this morning and we’re into it. So, you know, this is not a nine to five kind of environment. This is a team that is super passionate and super dedicated. And it just takes that level of commitment to do these amazing things. And some companies worry about millions of dollars, we worry about cents. Like everything is accounted for and is really, really well controlled.
Mo Islam
So yeah, you know, it’s funny. I have sort of this debate with investors fairly frequently where, you know, it’s very simple question, which is, look, we’ve been going to space since the 50s and 60s pretty regularly, yet, you know, fast forward to today and you have all these bright teams with great, seemingly, you know, great infrastructure, great strategies, generally everything sort of on paper checks the box and you know, they’re handed $500 billion and they still can’t get it to work. Why is that the case? You’re alluding to, I mean, look, you’ve alluded to why you’ve been able to make it work. And obviously, you know, if you ask any launch company CEO, they would probably say similar things. So I’m curious, is there like, if there’s a factor here that’s not being discussed or you think that is missing in some of these other companies that have burned through so much capital and quite frankly have created issues for the companies that are doing well.
Peter Beck
Yeah, yeah, yeah. Well, look, think if you just look at the data, right, you have Rocket Lab and SpaceX, and if you look at what is consistent there is that both CEOs of those companies are the chief engineers of the companies. Both CEOs of those companies, like me, I’m down at the engine, I’m at the test site and we’re doing real work. And the close couple of the engineering decisions with the business decisions I think is super super critical. So, you know, maybe that’s part of it but you know the great thing about the space industry is that you know physics doesn’t care about money. So, you can have as much money and take as much money as you want, but at the end of the day you know you still have to make the right decisions, and engineering execution is the ultimate leveler.
Mo Islam
That’s right. There’s an interview with Elon where he talks about during the Starship development process how he asked the team to make Starship pointier. And the decision was going to have no positive impact on the performance of the vehicle. And actually, arguably, it was slightly worse than the original Blunter design. And I’m curious, so when you were building Neutron…
Peter Beck
This is so funny. This is so funny. I was literally out at, not yesterday, the day before I was out at one of our other factories and we were working on the nose cone. And so the original engineering nose cone for Neutron was very, very kind of bulbous. And I complained bitterly that it just looked bad and it looked, looked phallic, it just did not look good. And, but of course it was structurally the optimum shape because you have a trade-off between the aerodynamics and the mass of the structure and you end up with this optimized shape. It just looked like ass. It looked terrible. So, you know, I did exactly the same thing, ironically, we changed the ODrive to, you know, to look much better. Yes, it’s slightly heavier, it’s slightly better aerodynamically, but it’s slightly, slightly heavier, you know, sometimes those things matter.
Mo Islam
I don’t disagree. Okay, let’s talk about the spacecraft business. You’ve recently won a very large SDA contract. From your perspective, has that de-risked the business, at least for the next couple of years?
Peter Beck
Yeah, I mean, look, that’s certainly a large contract, for sure. But I mean, there’s just so much going on within the business. Within the business units themselves, they’re doing really, really well and scaling really well, Electron’s scaling well. So all parts of the business are doing well. You can’t rest on your laurels and have one big contract and think life’s sweet. So, look, it’s an important contract, and it certainly gives some heft to the business and some scale, and that’s great. But it’s still on the floor. There’s much, much bigger things that we have aspirations to go after.
Mo Islam
So, and you know, the spacecraft business was built foundationally on a great M&A strategy. But you know, I hope I don’t get in trouble for what I’m about to say, but some might argue that building spacecraft is much easier than launch vehicles. So why acquire?
Peter Beck
Well, originally, look, I mean, think a lot of people think that we, you know, we kind of pivoted into the space systems area, but honestly, the very second Electron that we launched had recesses in the solar panels, know, know, recesses in the kick stage for solar panels to turn it into a satellite. It’s just, like, to finish one thing before I start the next. And, you know, timing is everything in that respect. So once we committed that, it’s time to move on to start building spacecraft, the first thing we did is we laid out a spacecraft on the boardroom table and pointed to all of the things that really sucked. And then strategically looked at, are we better to develop those in-house or are we better to see if we can acquire some of those technologies? And let’s just take solar as an example. I mean, solar is, you’re building compound semiconductors. There’s three companies in the world that can do that. So you’re a little bit naive to think that you’re just going to go out and recreate that. So we look for the best opportunity in that and the best technology. And hence the reasons why we went after Solero and were to pick up that business. So from an M&A strategy, some of it’s driven by a pain level, like how painful it is, and some is driven just purely by strategy and strategically, we need to own this particular thing. But you’ll see one thing across all of the acquisitions is we’re not acquiring things for their balance sheet. I mean, yes, they need to be profitable. Yes, they need to have great teams that align with our culture. And they need to have technologies that we really value and need. But these aren’t just purely financial decisions. These are things that really enable us to scale into bigger opportunities in the future.
Mo Islam
So it’s been mentioned a few different ways, is what I’ll say. And if you actually look at a lot of the models that the investment banks are putting out around Rocket Lab, they have two main revenue line items, which is launch and spacecraft, makes sense. But, there’s a lot of rumblings about Rocket Lab’s desire to build its own constellation. That’s not something that might be baked into a lot of these models, or a lot of these projections of where the business is going to the extent that you can talk about it, what is the high level plan around operating, owning, operating your own constellation?
Peter Beck
Yeah, look, this is not a secret by any stretch of the imagination. This is the plan. So, you know, what we’re really trying to do here is build an end-to-end space company. And, you know, if you look at, I think if you fast forward 5 to 10 years from now, what are the large space companies and what do they look like? They’re all going to be a little bit blurry between a services company and a space company. And, I think you don’t need to look any further than like, Starlink, for example. I mean, if you want to provide internet from space, then what do you need? You need unimpeded access to space at a cost point, so you need a rocket, a reusable rocket. You need the ability to build satellites at scale, so you need all the components and subsystems to be able to do that. And then the third thing is kind of the end application. So, you know, as a company, the reason why Neutron’s so important to us is, one, we’re looking to kind of disrupt the launch monopoly and medium class launch. Sure, there’s a great business opportunity and, you know, thing for us to go after there. But more importantly, I mean, our intention is to launch our own stuff. So, you know, I think, like I say, I think the large space companies of the future are going to look exactly like that. They’re going to have applications, they’re going to have the ability to build whatever satellite they need at scale, and they’re going to have unimpeded access to space.
Mo Islam
Does this look like an acquired business or developed and built in house?
Peter Beck
Way, way, way too early yet to say, right? Way, way early. Until Neutron’s flying, it’s all irrelevant.
Mo Islam
Okay, yeah. And so what do you think of the DOD’s plan, you know, $13 billion, you know, proliferated Low Earth orbit satellite services program? How do you kind of think about that within the context of everything you’re building?
Peter Beck
Obvious. I mean, the DOD has been saying forever that they need to disaggregate some of these big, juicy targets. The SDA is doing a wonderful job in robustizing the space supply chain. And the DOD has been very clear that the plan here is to disaggregate into low Earth orbit. So this is just as expected.
Mo Islam
So you did just recently have a pretty interesting hire that I wanted to talk about. You hired your new COO, Frank Klein. He has a pretty deep automotive background, which is reminiscent. It makes me think of your competitor in terms of some of their early operational hires. But I’m curious, tell us a little bit about Frank and what you think he’s going to bring to the table.
Peter Beck
Yeah, yeah, no, so it’s the first time we’ve had a COO within the business. So it’s, like you say, it’s a really important hire. And look, I think we’ve done well at scaling, and we’ve shown that we can scale Electron into a regular cadence and a number of kind of the components. But we’re looking to put the hammer down here and go to a much bigger level. Having someone with that level of experience is just super important from an operations perspective, as well as a background in production.
Mo Islam
What is your kind of, well, even before Frank, you guys have had a pretty robust plan around operations and scaling. What is your philosophy around operations? I use the example of Sinclair, one of the companies that you’ve acquired that produces reaction wheels. At the time of acquisition, it was something like 100 to 150 reaction wheels per year that Sinclair was producing. And now it’s 2,000. So, what were sort of those decisions that you’ve made that led to that type of scale?
Peter Beck
Well, I think if you look at the space industry in general, it’s small organizations producing exquisite hardware, but all at sub-scale. And we’ve seen it ourselves when you go to somebody and say you want to buy 100 of something and they just freak out. bringing scale to the space industry is something that’s really, really sorely lacked. And I think the one thing that Rocket Lab is really good at is very, very difficult things to produce and deep tech components and systems. We’re just good at making them. And we have a production system that works really well. So from a Sinclair standpoint, it was just kind of an obvious scaling factor. you look across all of the business units, whether it be separation systems, software or solar, they all follow the same path. The black wall goes up, the cubicles come down, the snack machines go in, and it’s time to go.
Mo Islam
Yep. I want to pivot for a second and talk a little bit about the market, specifically around launch and some of your competition with Falcon 9, now Starship, New Glenn, Vulcan, Ariane 6, a number of large launch vehicles coming online, obviously Neutron as well. What do you think the launch market is going to look like in terms of supply and demand? Like, do you foresee it being supply constrained, demand constrained? What do you think that’s gonna look like? I mean, we’re gonna see an influx of these new vehicles over the next few years.
Peter Beck
Yeah, tight. The reality is that let’s just take Kaipara. They procured all of the available launch in the world from Ariane 6 to Vulcan to Blue Origin. All of the launch available. For an initial deployment of the Constellation, one constellation, not an ongoing deployment, not a replenishment. And that’s one constellation and one customer. So, if you look across the industry, government and commercial, even if you apply some fairly hefty haircuts to who’s going to be there and who’s not, it’s very, very obvious that launch is going to be very constrained. And that kind of lead into a go-to-market strategy with Neutron is that with Electron, I kind of had to sell them at super discounted rates because I was trying to raise capital out of Silicon Valley. This time around we just don’t need to do that. Nobody wants to buy a that hasn’t flown for full price. But a go-to-market strategy is just a little bit different because we have the capital and we don’t need to do those kinds of things. And I think whoever turns up with a working rocket in a really constrained market is going to be everybody’s best friend.
Mo Islam
Do you think there’s any room for new launch startups? Or do you feel that that window is closed?
Peter Beck
To be honest with you, it feels closed. I mean, on the small launch side, certainly it feels very closed. On the medium scale, I think it’s difficult as well. Not necessarily because there might not be demand there. It’s just, I don’t know how you go from not building a small rocket and getting to learn all those lessons and embedding in an organization, to improving an organization, and then moving to a medium class vehicle. I mean, that is a proven path and road, right? And just going from like, we’re a new rocket company to let’s go build a medium class launch vehicle. As I was talking about before, it’s like one mistake and you’ve hosed away half your capital. Now on a small launch vehicle, one mistake, you’re talking about hundreds of thousands of dollars rather than tens or hundreds of millions. So, you just have a level of kind of cushion there to learn that you just don’t have. Look, this is my personal view. I think if you’re going to go and build a medium class launch vehicle straight out of a chute, I think unless you’ve got billions of dollars to go and undo it, then that’s going to be really, really difficult. And I just don’t see the markets ponying up billions of dollars for somebody to go and do that. I think there’s a good reason why you see the two wealthiest people on the planet having the two largest rocket companies.
Mo Islam
What do you think the future of launch looks like for countries outside of the US right now? Obviously there’s a lot of great American launch companies, but there’s a lot of other countries out there that will have their own military and kind of nationalistic ambitions that don’t necessarily want to rely on SpaceX and Rocket Lab and Blue Origin. So what do you think there?
Peter Beck
Yeah, no, they’ll build their own national capability for sure. And we see that, right? I mean, you Japan has H2, and Europe has Ariane 6. The challenge, I think, for a lot of these nations is that, you know, they have to be prepared to feed those launches and feed those companies with their own sovereign payloads. Because we get often asked, hey, will you come to our country and set up a launch site? For Electron, for example, used to get and still get that quite a lot because a country wants a sovereign launch capability because it’s a prestigious thing to have, of course, but also if you want to enter the space industry, that’s kind of a natural entry point. And the discussion was, go, sure, show us the sovereign payloads that you need launched. And that’s generally where things stop because our customers don’t care if they launch out of New Zealand, they don’t care if they launch out of the US, they’re looking for the best service. The launch site is relatively agnostic. In fact, a bunch of our customers really love coming down to New Zealand rather than our wallops launch site because they get to go jet boating and bungee jumping. So, I really think that unless you’re a sovereign nation and you’re prepared to feed your sovereign launcher with sovereign payloads, any commercial entity will just go where they get the best deal.
Mo Islam
As far as Neutron is concerned, I know that you have been thinking about, or I shouldn’t say thinking about, but human rating Neutron is definitely on the roadmap. Do you have any sort of internal or mental targets of when you think Neutron or Rocket lab will be going into human space flight?
Peter Beck
Yeah, look, we’re infinitely commercial. So, human space flight is obviously awesome and aspirational, but right now it’s well served by at least one provider and there’s one destination. So if you sit back in the cold, hard light of day and try to build an economic model around it, you can’t. You know, if there were multiple destinations and multiple customers requiring, you know, say multiple customers, mean, multiple long-term customers that require access. Then we’re all in, like show me the business case and we’re all in. And I think that will happen over time, I really do. Especially as space stations become commercialized and there’s more destinations, it will happen over time. Hence the reasons why we’ve made sure that Neutron is human rateable, because I think that will be a market. But as of right now, just, like I say, there’s one customer and one destination and it’s well served.
Mo Islam
Is there a Proton on the roadmap after Neutron?
Peter Beck
Well, look, I do not want to have to engage in another hat eating exercise. So, I’ve learned to say never say never, but certainly, you know, right now all focus is on Neutron for sure.
Mo Islam
What do you think right now as it stands, the most significant technical or strategic risk that the company faces?
Peter Beck
I mean, it’s a good question. Look, there’s no kind of like one giant red glowing thing. I mean, I think that the reality is with a space company is you have to be on top of it 100 % of the time. And we do very, very difficult things that have no margin for error. So I think that’s just a reality. The inverse, on the flip side, I mean, the company is well capitalized. The company is continuing to execute and programs remain on track. mean, really difficult programs like the Escapade mission to Mars. We delivered that on time, on budget. Not one, but two spacecraft to Mars. And just building a spacecraft to get to Mars is really hard. Doing it within a commercial set of boundaries and margins, way harder, and delivering it on time, these are all things that we need to do. And the team has demonstrated they can do them. So, I don’t mean to turn your question upside down, but I think there’s just a low level of background noise with a space company that you just have to be on it 100% of the time.
Mo Islam
What do you think about the lunar opportunity? There’s a number of companies obviously going after it. There’s a publicly traded company that’s building lunar vehicles and spacecraft. And obviously Artemis is right around the corner. So, how do you think about Rocket Lab’s involvement with the moon?
Peter Beck
Well, look, mean, we’ve had involvement in a number of ways already. So obviously we did the capstone mission. So, we love the moon. And we’ve had a lot of our components on various programs to the moon. And of course, the Blue Ghost vehicle has a number of Rocket Lab involvement in that as well. So, we love the moon. I guess it’s kind of a little bit like human spaceflight, though. I mean, what is the magnitude of that market and who’s buying? I think is kind of a little bit interesting. I guess, where I think lunar will get very, very interesting is if there’s a Chinese footprint go on the moon. I think at that point it’ll be all on and the moon will have a different set of strategic needs and motivations, but I’m not saying there’s no market for lunar, but it’s probably not as clear a path as some of the other things that we’re pursuing.
Mo Islam
Yeah, well, I’ll be honest, I’ve asked this question very directly to a number of folks who are building products or spacecraft for the moon. What is the market? What is the economic ROI on the moon outside of NASA writing a check? And the business case becomes challenged, that’s what I should say, for the time being, right? Obviously, there’s a lot of, you know, assumptions that you can make and what the economy is going to look like in a few years. But you have to make a few leaps to kind of get there. Peter, know you’ve been standing here in one place. I have a few more questions to ask, I’m just curious if there’s anything else you’d like to show us.
Peter Beck
Well to be honest with you I shouldn’t show you too much more. My team’s giving me hand waving signals so I know I’ve been told to stand put.
Mo Islam
Hahaha! Okay, fair enough. Well, okay, so I do have a few more just kind of personal questions for you. You’ve built a very successful business in the industry and arguably one of the most challenging technological areas. What sort of, you know, a lesson or principle from your experience that you think space industry leaders should embrace or folks that are starting companies now should think about an embrace?
Peter Beck
If you’re starting a company, don’t fall in love with the technology. Like be harsh. It’s like look for the business opportunity and create the technology to fill that gap. I mean, the great thing about the space industry is it’s full of visionaries, but you have to be a visionary who executes as well to be, you know, to survive and to thrive. So, you know, that would be my advice for anybody looking to start a space company is really look for the market opportunities that are solid and real and now, and then build technologies to go after them. Don’t fall in love with your particular gadget or your technology and then try and force it into a market.
Mo Islam
What keeps you up at night, if anything?
Peter Beck
Everything. Sleep is not something I do well. And I think, look, at the end of the day, I’m incredibly passionate about this company and incredibly passionate about what we do. So I’ve never understood how anybody can kind of go home at night and turn that off. That’s just not a reality for me. So, everything. And I think if that wasn’t the case, that would be time for me to go because I think in order to be successful, you just have to have a level of commitment and passion. Otherwise, you shouldn’t be in the game.
Mo Islam
You’ve been now a public company CEO for a few years. How has that been? Looking back on it, I’m sure there’s no regrets, but is there anything that you would have done differently approaching the public markets? I guess there’s a two part question there. That’s kind of question one. Question two, I’m curious, this is something that we get a lot from the institutional investors. When do we think that space is going to be an industry that’s going to be welcomed by or appreciated by the public markets because for the most part, it’s not right now. There’s a lot of companies that face far greater challenges of even staying listed on an exchange, will potentially be acquired. Maybe talk a little about what you think the future of space is within public markets as well.
Peter Beck
Yeah, well, so it’s a fair question. So firstly, from a Rocket Lab perspective, our intention was always to go public. We saw an opportunity for a pure play end-to-end space company in the public markets. Yes, it’s a new thing, but I think space is kind of, in some respects, a little bit like AI, right? If you think about the two biggest things in the world that are happening right now, it’s really space and AI. So, having a publicly traded company in this space that’s pure end to end in a new space, I think, was important. It was important to have a company there that was going to do well, kind of to your point, Adam, my CFO, keeps reminding me we have the best house on the worst street. But eventually the street gets gentrified, right? And the markets are very efficient, as everybody’s seeing it, determining who are real and who are the winners and who are the losers. So that’s all good. And then, you know, look, from a personal perspective, I wanted to take this company public for a slightly different reason in the fact that the last thing I wanted to do was build a whole company around Peter Beck. Ultimately, when I depart this planet, you know, you’re measured on how much impact you have. And the way to have a lot of impact is to have endurance. So the one thing that a public company really forces you to do is to have a very sharp eye to profitability, a very sharp eye to sustainability. And all of those things are sometimes a bit painful, but those things are good forcing functions. And it would be a massive failure if I left this company one day, and it stopped. And I think if you look at some of the other space companies out there, it’s not that clear if those personalities depart, whether or not those things continue. And like I said, I really want Rocket Lab to be a multi-generational space company that is enduring, and taking it public is one way to force all the right behaviors to make that happen. Look, I think there’s a great opportunity for the public to share in a new technology and a new technology space that’s really interesting. So I’m not sure if I answered both your questions there well or not, or just one of them.
Mo Islam
You actually not only did you answer those two questions you also asked you also answered another question which was a which is what that I was gonna ask which was how do you want to be remembered, so you nailed three and I didn’t even have to ask the third
Peter Beck
That’s efficient. Excellent. We’ll chalk that one up
Mo Islam
Well, okay, so we’re getting to the end here if you had unlimited resources and no regulatory constraints. The second part is probably pretty important. No regulatory constraints, unlimited resources. What’s a project that you’d be focused on right now at rocket lab?
Peter Beck
Look, to be honest with you, I’m living the dream. You know, we’re doing everything that I want to do. We have interplanetary missions, have Neutron, we’re growing quickly. You know, we get to play in the most amazing projects and do the most amazing things and work with the most incredible customers. Look, honestly, I’m living the dream and, you know, there’s always a set of constraints. You have to live within the dream, but really there’s nothing I wake up in the morning wishing that I could do. I’m doing it.
Mo Islam
So just to end here, just a couple of prediction questions. First is, is there anything that you are seeing, a trend you’re seeing or expect to see that you feel like isn’t being talked about enough in the industry? Maybe something that’s unique to your perspective based on some of the things that you’re surrounded by and you see.
Peter Beck
Yeah, look, I’ve been saying for years now, it’s clear as a pane of glass to me that, and I’ve said it in this interview, is that the large space companies of the future are going to be blurry about what they look like. Are they a space company, or are they a services company? And I think Starlink has woken a lot of people up. For us, it was just so obvious. If you’re a commercial comms company right now, I think you’re doing a little bit of searching because this thing that’s come in has just disrupted the entire comms industry. And the Starlink satellite’s a great satellite sure, but actually the thing that’s really disruptive here is just low cost and complete access to space. That is the most disruptive thing of all of this. And that’s why Neutron’s so important. Without having that access to space, you can have all the satellites you want sitting on the shop floor. It’s just the business models don’t close. So I think for me, I’ve been talking about this for a long time. We’re building this end-to-end space company. I think when we first started moving into the satellite industry, people said, well, we’re pivoting and started building satellites. It’s like, it’s a different business model. But no, this is all a grand strategy to end up as an end-to-end space company because I think, as we look back, that’s that those are going to be the real big companies.
Mo Islam
So, last question, date for humans on moon and humans on Mars, what do you think?
Peter Beck
Wow, look, I think there’s a high degree of probability that the next footprint on the moon will be a Chinese footprint. And then I think very shortly after that, America will have a return presence to the moon. So, you know, I’m not particularly good at dates. So, you know, I would hate to put a date on it, but certainly within, before the end of this decade. And I think, look, Mars is an unknown window at this point. I think with a new administration, there’s clearly a focus, a much stronger focus on space, and Mars will be a part of that. So, I expect things to probably grow and accelerate within the space industry as a result. So, I think there’s one other rocket CEO who’s far better placed to answer that question than me.
Mo Islam
Yeah. Well, Peter, thanks so much for being on the show. This is great. Thanks for giving us such a unique backdrop for letting and letting me ask those questions. So again, thanks so much. Would love to have you back post launch of Neutron. So till then.
Peter Beck
Yeah, my pleasure, and thanks for putting up with a last minute non-standard situation. So, appreciate it.
Mo Islam
Perfect. Thank you, sir.
Peter Beck
Cheers.
